Definition
Self-Attribution Bias
Self-attribution bias is the tendency to credit good investment outcomes to your own skill while blaming bad ones on bad luck or external factors.
By taking credit for wins and disowning losses, investors fail to learn from mistakes and grow overconfident, often increasing risk and trading after a lucky run. It distorts the feedback loop that should improve decision-making, since errors are never honestly examined.
Keeping a decision journal — recording the reasoning behind each trade and reviewing outcomes objectively — counteracts self-attribution bias by exposing how much of your success was skill versus a rising market. Honest accounting of both wins and losses is essential to genuine improvement.
Related terms
- Confirmation BiasConfirmation bias is the habit of seeking out and believing information that supports what you already think, while dismissing evidence that contradicts it.
- Overconfidence BiasOverconfidence bias is the tendency to overestimate your own knowledge, skill or accuracy, leading to excessive trading and concentrated bets.
- Hot Hand FallacyThe hot hand fallacy is the mistaken belief that a recent run of success will continue — for instance, that a fund or trader on a winning streak is bound to keep winning.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.